Describe the bad effects of informal sources of credit on borrowers. - Social Science

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One Line Answer

Answer the following question.
Describe the bad effects of informal sources of credit on borrowers.

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Solution

The informal sources of credit are the moneylenders, traders, employers, relatives, and friends. No external organizations control the credit activities of lenders. The rate of interest can be really high as it depends on the wishes of the lender. They can also use unfair means to get their money back.
Concept: Formal and Informal Financial Institutions for Savings and Credit
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2018-2019 (March) 32/1/1
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